We talk to Frans Nauta about his experience building the world's largest green business competition from scratch and learn the secrets of building a successful clean tech start-up.
Let’s start off with a bit of history - we wanted to know, what were the steps that led you to founding ClimateLaunchpad? How would you connect the dots looking back? Well I was bored. Just kidding! I studied environmental technology back in university - I was convinced that business was the root cause of environmental issues. I spent a lot of time working with governments and I could see some downsides there. At the same time, I saw some pretty impressive results coming from businesses and innovation so I became more interested in that. My increasing interest in start-ups led to me getting an invitation to become the Director of Entrepreneurship of Climate-KIC, which was a new entity at the point of time in Europe. I had access to resources to launch a start-up accelerator programme called the Climate-KIC Accelerator. That programme has now taken 1500 teams who together have amassed about 1.5B in investment. It grew into the biggest kind of its programme in the world.
We wanted to do some marketing for the early-stage start-ups as well, because the Climate KIC Accelerator started to gain some traction for those committed to starting a company. We started with Facebook campaigns but in the end we thought - why not hold a competition? Because entrepreneurs don’t like schools but they do like competitions.
We camouflaged a training programme with a business competition format. The idea was to do it once, but now we are in year #6.
We also planned to remain within Europe but now I think it is almost in every continent except that we don’t have penguins from Antarctica in the competition.
We never imagined it to become very big. That was not the goal at all at the start. We just sort of stumbled into it.
Thank you for sharing your journey! That was really inspiring! It has been an amazing experience so far for us getting to meet all these teams. Some of them just come with an idea, not even a business but they still have so much potential. Can you tell our readers a little more about ClimateLaunchpad?
It’s like business school for entrepreneurs that want to do good for the environment and start their first green company.
We’ve had experienced entrepreneurs saying, “God! I wish I had this 20 years ago!” But the core audience that we do it for is really those thinking about starting a company and don’t know what to do - a fast-tracked business school programme. Most entrepreneurs I know don’t like school so we thought it will be fun to not only have a curriculum, a bootcamp to train people, but also to bring a little excitement in through competition. We have this thing in Europe called the Euro Vision. It’s a singing contest in which each European country sends one team and they compete. It’s a pretty big deal in Europe and its quite fun, so we thought we’ll adapt the format where each country gets to send a team, in our case 2 or 3 teams, and we just copied a few things basically. It works quite well. This brings national pride into the equation which gives it extra energy. Of course, we didn’t completely foresee that. We improvised and executed the first edition in just 6 months with a really good group of people. Like I said, it was supposed to be a one-time thing, but because we had so much fun, we were like “we should do it again!”. That’s why right now we are in year 7. Congratulations on all the success with ClimateLaunchpad and we hope it becomes even bigger than it is at the moment.
With all your years of experience in the clean tech industry, how would you say the clean tech innovation scene has changed since you first entered it? Well, on the start-up side, I think things haven’t changed that much in a sense that there will always be idealistic entrepreneurs. Every year there is always a trend - 2 years ago, plastic straws were banned from public use in many countries. In almost every country there was a plastic straw replacement team and last year it was disposable packaging for takeout food.
Often, entrepreneurs respond to what politics or society perceives as a problem, but that’s not always where the market is.
What has changed is that we now have a few big success stories. We have wind becoming the cheapest source of energy in most places, the same is true for solar. Batteries have become incredibly cheap, thanks to Tesla, electric cars as well. There is a feeling now that - wow we can create a whole new industry if we do this smartly. Now, climate change is not seen as a cost problem but more of an economic opportunity. I think that might be the biggest change but then again, the other side of the equation is that the funding has not been that great. There is not a lot of investment available for entrepreneurs that want to work on clean tech. The market still has to catch up to the political hype.
We are trying to create a movement of entrepreneurs around the globe that show that there are opportunities there.
You are spot on about trends. This year across the countries, we are seeing a lot of e-commerce solutions, I think partly due to covid-19 and the rise of telecommuting. So on that note, do you think that covid-19 might make circularity and sustainability more urgent on government agendas?
It depends a bit on the country where you are and the political dynamics in each country. There is a huge amount of government money coming in to dampen the economic crisis due to covid-19 and where you put that money makes a huge difference. You can put it in old industries - you can also put it in new, or clean industries. So what I’m seeing is, I’d say, a mixed picture. The big companies who tend to not be the green ones, of course always have good government access and lots of lobbyists. But I do see lots of funding coming up for innovation and green technology so i’m not pessimistic on that front. There is one source of scepticism though. Those who think we should act very drastically on climate change now have a case that humanity is willing to actually completely freeze its economy. But it wasn’t climate change that was the driver for that of course, it was that people were dying.
So I think for the green movement, it is sort of like a reality check. We have been saying for years that we want people to fly less but the industry kept growing. People were willing to fly less when it was about life and death but it seems that they are not willing to do that when it is about climate change.
A little humility for the people who want to push the green agenda that they haven’t been able to convince society to do drastic things yet and covid-19 clearly has. If we want to fix climate change, it probably has to be in the way of the electric car or the way of wind energy where the green alternative is better or just as good and cheaper, compared to what is out there right now. Have you ever sat in an electric car by any chance?
I might have. I think some of the grab cars that we take in Singapore are electric. This is actually a very good answer! Because it means that it is so good that you don’t notice the difference. I have one, I’m driving an electric car as we speak and it is actually a better car than a normal car. So this is the way to go for green solutions. For the idealistic 10-15% of the population, they may pay a premium for a green solution compared to the alternative. A friend of mine got the first Tesla, a small sports car. Everywhere she would go, she would need to ask people for a plug to charge her car. I think this was like 12 years ago. It was one of the first in the country. So the pioneers always suffer because you have to figure everything out. Nothing is adapted to what you need. For those 10%, it’s okay if it’s not that great but promising.
But for the rest, it needs to be just as good, same price or cheaper.
It needs to be a better experience, otherwise it just won’t happen. So if you want to think about greening the aerospace industry or greening food production or greening the way we make clean water - all those things are all about coming up with better solutions that are cheaper or better or preferably both.
And that is very hard, of course. Very often, we work in existing industries and they didn’t become existing industries for nothing. They’ve become really good at solving a problem in a certain way so it is really a challenge to come up with smarter methods. To do that, you need enough funding. It is nice to brainstorm over zoom that you have a better solution but to actually build it, it is very expensive. It takes lots of time and resources. I would say covid-19 will help in certain ways, in speeding up innovation because there is more government funding available to explore ideas and it might help to get more investor capital for bringing them to market. I have worked in government, in politics, also in large businesses. I expect the biggest breakthroughs from, new companies – you probably know our motto - fixing climate change one startup at a time, I truly truly believe that. If you want to fix climate change, it’s hundreds of problems with one sticker on top of it called climate change. Fixing those hundreds of problems will take thousands of startups.
On that note, Frans, you spoke about making green solutions more attractive to potential consumers. Is there anything about green solutions or cleantech innovations in particular, that makes it harder to build than more conventional innovations, for example, like technological innovations in Silicon Valley? Yes of course it’s harder because most of our solutions are not just about improving software. We need to build something with real materials and we need to produce at scale. All of that is super expensive and more risky. If we have a breakthrough solution in software, all we need to do is get a laptop and work on it and if we work long enough, we will have a product we can launch. It may take 2 years since I am a shitty programmer. Well we can get a few people on board, and with like 10 people, you can build something like Instagram and WhatsApp. The other part of this equation is that if you come with Instagram or WhatsApp, you enter pretty empty space. If we come up with an Instagram competitor, that is a very different story.
Most clean tech solutions are focused on an existing market. It is nice to come up with solar panels but there is a whole market out there that produces electricity and we have to compete head-on with that market. So it is harder.
It is mostly hardware which is more expensive. You are basically trying to transform existing industries whereas in software – the biggest successes (and there are many theories about that well) actually create new things that have much less competition, like WhatsApp, Instagram, Facebook. So yes software is easier, no doubt! Software is for wussies, you know, we do all the hard work!
What can policymakers, governments and enablers do to accelerate green solutions, and overcome the barriers that make cleantech innovation hard?
They need to ensure there is a market so entrepreneurs have a chance of creating a business that is successful. If there is no market, it won’t work. Think about wind and solar and electric cars - the market was artificially created by governments saying, we’ll support this while it’s still too expensive. That’s what Denmark did for wind, what Germany did for solar, and what California did for electric cars. In California you were forced to produce and sell zero-emission cars - that opened a window of opportunity for Tesla. Tesla has never really made money selling its cars. Its made money by selling emission rights that it doesn’t need, and because of the rebate (the 700,000$ the US government gives as a discount to make it cheaper), so Tesla can charge a higher price and take the price difference. It’s about creating temporary markets when the alternative is not competitive yet. Of course you would want to pick something that can eventually become competitive as well. The way that worked with solar, wind and batteries as well is that the industries grew, and with traditional economies of scale, prices went down. Now wind and solar are one of the cheapest forms of electricity in the world.
I also wrote an article this, on the idea of “deployment led innovation” - read it here.
It is great to do research and to come up with innovative ideas but the only way to actually make sure that something happens in the real world is if you put deployment first. Put things in the real world. For example, wind turbines were incredibly expensive per kwatt/hour but it was a necessary step to put them in the real world not as a pilot, but for real customers. You get feedback from your customers and the feedback forces you to improve it and you have discussions on the operation and maintenance cost – cause they’re way too high – and if you do that in a lab space or in a university with professors, it’s not going to be a problem for the operation and maintenance cost because it’s a part of their research.
This is why I like entrepreneurs so much because they are focused on customers and not on research projects.
What has been the proudest moment in your career so far?
*erupts into laughter* There were many proud moments but also many humbling moments, I would say. But I can give you one from this year, because it was last week. It was one of the highlights of the year. We got a survey response from a ClimateLaunchpad team - someone wrote to us,
“I finally found my crowd where I can discuss my idea and they get it, and help me develop it further. I’ve never felt like that before in my whole life.”
The other one was similar, it was in 2015, someone wrote,
"If fixing climate change was always this much fun, we would have fixed it decades ago.”
In the end, you know the best moments are when you get proof that you are helping people be successful and achieve things. A lot of motivational quotes online say - “some of the wealthiest and most influential entrepreneurs in the world are college dropouts”, for example Steve Jobs, Bill Gates, Mark Zuckerberg. Is a college education important to becoming a successful entrepreneur? It’s a silly American story. You know, once Steve Jobs started his company, the only people he would hire are those who had a college education. And Bill Gates did the same. So yes, there are exceptions to the rule, that you can be very successful without a college education, which is great. But a college education is wonderful - you learn so much stuff about life, why would you not do that? In your early 20s, you can work for another 60 years, there’s no reason to stop working when you’re 65, that’s a really weird concept.
Suddenly golf becomes exciting because you don’t have anything else to do. That sounds to me like a pretty miserable plan. Finish your education in the normal way, and then become productive.
I wouldn’t suggest to people that their first work be to run a new company. I think, for most people, it’s very good to work in a large company, or inside government, or at an NGO for a few years. This way, they can learn how the world works. The world does not work as a start-up.
Sometimes there are exceptional start-up stories that are very successful, but the world is a complex place. Just think of a place like a hospital - it’s wonderful. If there is one thing we learned through covid, it's that it is really important to have a good functioning government.
So I would suggest to maybe work a few years in government, work a few years in business, that’s what I did. And then start your own company. Of course if you have a great idea now, and the timing is perfect - that’s what happened to Gates, that’s what happened to Zuckerberg, that’s what happened to Jobs and Wozniac - they had the perfect timing with the great idea, then you might drop out. But if you don’t feel the urge that it’s now or never - finish your college, work in a government or large company, and join a start-up. Don’t necessarily found one. Learn as you go, bring all that expertise, and then start your company. All of those are wonderful paths.
You can start now, but you have your whole life to start a company. I’ll give you my third proudest moment, I have a picture of it - it’s 2015, I was doing a bootcamp in Iceland. I had someone who just retired in my bootcamp, his name was Jon. He had a corporate career his whole life, he knew a lot about Aluminium smelters because he worked as an engineer in Iceland. He had a hard time, but he put up with my challenges, and actually won the second prize that year.
And I got a picture from him, just 2 months ago, where he made his first new batch of aluminium, about 15cm wide. The picture shows him offering the first piece of carbon neutral aluminium to the president of Iceland.
So you can start your company when you retire. You can of course, do it in your 20s, I’m all for it, but there is no need to. I strongly encourage everyone to finish their studies.
If it was so amazing not to finish school, Apple, Microsoft and Facebook would only hire people who quit their education. In the real world of course, they do the opposite, they want people with good degrees. What is one quote you live by in your daily life? It’s the ikigai principle! I think that is the richest description of what a good life is. To do something that you are good at, makes you happy, has impact, you’re proud of it, and you can also get paid for it. Passion, mission, profession and calling - when those align, it is the best thing. I can honestly say that things like ClimateLaunchpad are totally in my ikigai zone. Do you have a book to recommend to our readers?
Well I’m working on a book myself but it’s not finished yet so… *laughs*
Somebody wrote a book on the secret history of the iPhone, it’s called The One Device, and it’s a beautiful journalist journey that showed how innovation works. It doesn’t say that Apple was so brilliant, and came up with everything out of thin air. It shows that Apple was standing on the shoulders of giants, or even midgets.
They are standing on somebody else’s thinking, or ideas, and they combined those into the iPhone. So what I hate about Hollywood's portrayal of entrepreneurship is that they all want to have a hero - a single brilliant person that creates it all. Steve Jobs, Bill Gates, Mark Zuckerberg
And of course, it’s bullshit. These people take credit for work that is collaborative. Innovation, fixing climate change, is a collaborative effort of millions of people in the world.
If we want to fix climate change, it’s gonna be 1000s of people all over the world working on this. Of course, at the end of it, one of them will want to take credit, but it’s not true. This is a collaborative effort.
It’s the same with covid. There are 200 teams around the world trying to make a vaccine. One of them is going to win, but without the other 199, that winner would not be there.
So, that’s what I really like about that book, it shows not how Apple invented the iPhone, but how hundreds of people, all brought in pieces of the puzzle, and then yes, Apple assembled all those pieces into something new. It’s a small part of what makes the iPhone great. Most of what makes the iPhone so amazing is how 30 years of innovation came together in one device. It wouldnt have been possible without all those hundreds of people contributing to it.